Budgets of the Amalgamated Territorial Communities have Sufficient Funds; Now It is Important that Administrators of those Funds have Used Them Efficiently, Yanina Kaziuk

The budgets of two groups of the amalgamated territorial communities (the first group consists of 159 ATCs established in 2015, and the second group consists of 207 ATCs established in 2016) brightly demonstrate the financial decentralisation in full play. Both have increased. It means that villages and towns which have taken advantage of the mechanism of voluntary amalgamation of territorial communities now have money to not only pay wages to the staff of their local councils, as it was prior to the reform, but also a resource to revive and develop the infrastructure, establish better living environment for the community residents. It was so said by Yanina Kaziuk, Financial Decentralisation Coordinator of the Central Office for Reforms at the Ministry of Regional Development (with the assistance of the U-LEAD Programme). She commented on the information regarding the performance of local budgets of the amalgamated territorial communities for five months of 2017, as prepared by the Ministry of Finance.

The expert stated that the 207 amalgamated communities which had been established in 2016 and, therefore, had transferred to direct inter-budgetary relations with the state budget only in this year received three times more own resources. By way of comparison, prior to the amalgamation, that is, over the period from January to May 2016, that indicator totalled UAH 400 million, today it totals UAH 1.5 billion.

The 159 amalgamated territorial communities which have been operating under the new budgetary and financial conditions for two years, have increased earned revenues to their budgets by 42% (+ UAH 455 million). That indicator, according to Yanina Kaziuk, is higher than average in Ukraine. As a matter of fact, the rate of growth of the earned revenues of all local budgets of Ukraine totalled 34% over the reporting period.

Consequently, the earned revenues of local budgets of the 366 amalgamated territorial communities have increased by more than twice and totalled UAH 3.2 million (+ UAH 1.6 billion).

Calculated per resident, the average amount of influx of the earned revenues in the amalgamated territorial communities increased by UAH 307 and totalled UAH 998.

Inclusive of inter-budget transfers from the state budget, the revenues of the general fund of local budgets of the 366 amalgamated territorial communities totalled UAH 6.9 billion.

"Budgets of the amalgamated communities have sufficient funds; now it is important that administrators of those funds - councils in the communities - have used them in a responsible and efficient manner", Yanina Kaziuk said.

The influx of own resources to all 366 amalgamated territorial communities over the period of January to May 2017, in comparison with the same period of 2016:

in total – UAH 3.2 billion (a twofold increase or by UAH 1.6 billion), in particular:

Inclusive of transfers from the state budget, the revenues of the general fund of local budgets of the 366 amalgamated territorial communities totalled UAH 6.9 billion.

The influx of own resources to the local budgets of the 159 amalgamated territorial communities over the period of January to May 2017, in comparison with the same period of 2016:

in total - UAH 1.540 billion (an increase of 42% or by UAH 455 million), in particular:

personal income tax totalled UAH 851 billion (an increase of 48%);

land use fee totalled UAH 231 million (an increase of 18%);

excise tax totalled UAH 167 million (an increase of 26%);

flat-rate tax totalled UAH 218 million (an increase of 62%);

immovable property tax totalled UAH 21 million (an increase of 57%).

Inclusive of transfers from the state budget, the revenues of the general fund of local budgets of the 159 amalgamated territorial communities totalled UAH 3.1 billion.

The influx of own resources to the local budgets of the 207 amalgamated territorial communities over the period of January to May 2017, in comparison with the same period of 2016:

in total - UAH 1,691 million (a threefold increase or by UAH 1,122 million), in particular:

personal income tax totalled UAH 921 billion;

land use fee totalled UAH 259 million (an increase of 20%);

excise tax totalled UAH 154 million (an increase of 32%);

flat-rate tax totalled UAH 283 million (an increase of 57%);

immovable property tax totalled UAH 24 million (an increase of 67%).

Inclusive of transfers from the state budget, the revenues of the general fund of local budgets of the 207 amalgamated territorial communities totalled UAH 3.8 billion.

Note. The information is provided with reference to official data of the Ministry of Finance of Ukraine on the basis of achievement of local budget targets by the amalgamated territorial communities prior to and after their voluntary amalgamation and after the acquisition thereby of the right to direct inter-budgetary relations with the state budge